How will bankruptcy affect your spouse?
When you’re struggling with debt, there are a variety of options you can consider. In some instances, filing for bankruptcy is the best choice; although, it should always be the last resort. If you are insolvent, you may be contemplating this strategy.
One important detail to keep in mind, if you’re married, is how filing bankruptcy will affect your spouse. It’s very common to start your marriage in debt. As a matter of fact, numerous couples begin their new lives owing more than $20,000. It's important to be open and honest with your spouse as to how much debt you have so that you can work together to dig yourselves out of debt. If you find that you have buried yourself in too much debt, and bankruptcy is your only option, what does this mean for your spouse?
The more that you know about the bankruptcy process, the more you will be able to make an informed decision. If you are presently planning a wedding or are married, you should know that in some cases, financial obligation does affect your spouse.
Here are some points that you should consider:
First, if you owe money, your spouse is not necessarily indebted, as well. Your partner does not legally take on the responsibility to your creditors unless he/she has guaranteed or co-signed for a loan.
The same principle is true of credit cards. If yours are all in your name, your spouse need not pay them. If you have credit cards for a joint account, however, then you are both liable. Also, if your spouse has a supplementary card in his/her name, but it is tied to a joint account, they could be held responsible for the charges incurred on the entire account.
While your partner in marriage may not be jointly indebted to various creditors, he/she may still be affected by your insolvency. If you must file for bankruptcy, you may find it very difficult to obtain credit for some time. This can impact your spouse because you might not be able to co-sign for a loan. As you rebuild your credit, you may both need to put off important purchases and decisions.
If you're in a relationship and need help getting out of debt, don't hesitate to contact us to set up a free, no-obligation consultation. We will review all options with you and if bankruptcy is the best option, we will go over all of the ways it will affect your spouse.